Let go of the invisible hand – equality leads us to growth and prosperity

The OECD has reported that the inequality gap around the world is growing, there’s a clear link between that gap and sluggish growth and government actions can help permanently reverse this. In other words, relying on the trickle-down economics (as the Conservatives do) not only continues to squeeze the middle class, it actually hurts growth and prosperity for the entire country. Like many other Labour Parliamentary Candidates, I’m campaigning for Squeezed Middle, but this report shows us that we’re fighting for what is not just fair, it’s economic sense. Being fair, aspirational and successful can go hand in hand, and this report helps prove that point.

Ever since the Thatcher/Reagan era, Conservative economics has more or less been the theory to beat. Remove restrictions for the very richest, and they will become the country’s wealth generators and trickle it down to the rest of us. The OECD (arguably the most influential western economic think tank) agrees with half of that theory. Its report released today sets out in clear terms that the wealthiest 10% in society are 9.5 times as rich as they were in 1985 whereas the poorest are only 7 times as rich. This yawning gap means the gap of wealth gets larger and the wealth stays at the top (apparently trickle down enthusiasts should get the number of a decent plumber).Those who stand to lose the most are the poorest 40% of the country, those who Ed Miliband calls “the Squeezed Middle.” The central pillar of the Conservatives economic argument that only they can balance the books and generate growth actually means they only helps some people a bit but at the cost of the rest of society.

But the second part to this report is the one that makes it stand out, and indeed, gives the progressive left some serious evidence when making the case that fairness breeds success for everyone. The report states that in the years after 1985, the yawning gap of inequality hindered growth in the UK by around 10%. The OECD goes as far as saying that government actions that aim to reverse the yawning gap would make countries richer: government action to make society more equal and fair makes everyone better off. Fairness and mutual support towards prosperity is one of the reasons why I joined the Labour Party, I’m just glad to see the OECD caught up with us.

This report is a really good source of knowledge and evidence for when you’re out campaigning. I’m sure you have the same problem I get on the doorstep and on social media: I’m told that the Tories are doing what they have to dig us out of this economic mess. I’ve now got some very hard figures to show that Labour’s vision of Britain means we all can prosper while being fair to each other, and the Conservative’s way forward is not the answer. Taxation on higher earners and the mansion tax can help, but it’s the positive policies we’re currently advocating that can help growth. These positive policies include supporting the living wage, providing assistance to small businesses, forgiving national insurance to apprentices and giving power and control over infrastructure back to local cities and regions. These are the levers that empower people, narrow the gap of inequality and therefore leads to sustained growth for everyone (including the top). These are the policies that help all of society earn and grow. But most of all, it allows everyone to aspire, because they know they’ll be getting a fair shot.

Bilal Mahmood is the Parliamentary Candidate for Chingford and Woodford Green